Kohlberg Kravis Roberts Quarterly Profit Jumps 53%

Kohlberg Kravis Roberts said on Thursday that its fourth-quarter after-tax profit rose 53 percent despite a quarter of tumult in the stock market.

The private equity giant, led by Henry R. Kravis and George R. Roberts, said its after-tax economic net income was $70.5 million in the fourth quarter, compared with $46 million in the period a year earlier. The earnings amounted to 8 cents a share after taxes, significantly short of the 27 cents a share expected by analysts surveyed by Thomson Reuters.

For the full year, Kohlberg Kravis said its after-tax economic net income for 2015 was $1 billion, down 30 percent from the previous year.

The firm also said that it had bought $270 million worth of its own shares, as part of a $500 million share buyback it announced in the third quarter. In recent months, a wave of private equity giants have announced record share buybacks in an effort to bolster confidence in their businesses and lift the price of their stock. Last week, Apollo Global Management pledged to buy back shares worth $250 million, while Fortress told its investors it would buy back $100 million.

The share price of Kohlberg Kravis has halved over the past year.

During the second part of the year, global markets tumbled and the price of oil plummeted, dealing a blow to the value of the firm’s investment holdings. The firm reported a sharp loss in the third quarter, as did some of its peers, including the Blackstone Group. For most of the industry, the core part of the business remains investment fees driven by a private equity firm’s exit of its private investments through a public listing. Fewer of those took place last year compared with previous years, when the stock market rallied.

Kohlberg Kravis changed the method of its reporting for a second time in 2015. In the fourth quarter, it reported out four separate segments, adding a new segment devoted to its balance sheet performance. In the first quarter, it told investors that it had changed the way it breaks down the economic net income for each of the three segments it reports to more accurately reflect the income generated in each segment. For these reasons, some of the earnings reported in the fourth quarter were not comparable to 2014 figures.

The firm also changed the way it calculates assets under management in the fourth quarter, choosing to include money it has raised for new funds but not yet deployed. For this reason, the figure has swelled to $120 billion.